The Supreme Court‘s ruling against the Trump Administration‘s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs raised “several critical and unresolved questions” regarding tariff policy, the American Lighting Association noted in an online post last week.
For starters, the ALA said, it does not address the status of negotiated trade arrangements or informal understandings reached with U.S. trading partners under the threat or expectation of IEEPA-based tariffs. Neither does the ruling address the issue of potential tariff refunds.
“It is also unclear how quickly, and through what specific mechanisms, the Administration will seek to reassert tariff authority,” the ALA said.
Indeed, over the weekend, President Trump announced a universal 15% levy under the Section 122 rule which allows temporary tariffs of up to 15% for 150 day, a provision that allows temporary tariffs to address large trade imbalances. This was an option explicitly suggested by the Court of International Trade as a preferable alternative to IEEPA, the ALA noted last week. Congress would need to vote to extend it.
The 15% surcharge typically applies on top of existing Most Favored Nation (MFN) duty rates. However, it does not stack with Section 232 tariffs on products such as steel, aluminum and wood-derived upholstered furniture. In those cases, importers generally pay the sector-specific duty instead of an additional 15%.
There are exemptions and negotiated limits that still stand. Some goods entering under the U.S.-Mexico-Canada Agreement may be exempt. In addition, certain trade agreements with partners, such as the European Union and Japan, still take precedence over the universal levy and thus limit total tariff exposure, capping rates rather than layering duties.
The ALA highlighted other potential alternatives the Administration might use to keep tariffs in place, including:
- Section 338 (Tariff Act of 1930): This authority allows the US to enact tariffs against countries deemed to discriminate against US commerce and has been specifically referenced by Treasury Secretary Scott Bessent.
- Section 201 (Trade Act of 1974): Section 201 is a safeguard mechanism allowing tariffs of up to 50%, though it requires USITC investigations and public hearings and would take longer to implement.
- IEEPA alternatives: The International Emergency Economic Powers Act (IEEPA). One of the plaintiffs’ lawyers argued that tariffs are not allowed under IEEPA, but policies like quotas may be. Tariff-rate quotas weren’t raised, but licensing fees were. The administration could potentially enact a rebrand under this same authority.
The ALA said it will be closely monitoring which statutory pathway the Administration pursues next and keep its members updated. — Spencer Musick of Furniture Today contributed to this story.
